"I would like to give my view of one strong possibility for Zaruma, Century Mining, White Tiger Gold and Intergeo.

Again, only my view of a possible scenario for blog discussion purposes. To be clear, I am not accussing anyone of anything. It is impossible to know for sure how the situation will unfold (as it hasn`t happen as yet). However, as a Century shareholder, I am very concerned with the possibilities of this direction.

According to a recent article, Prokhorov owns 80% of Intergeo and Finskiy owns the other 20%. Again, I have nothing to confirm if this is absolutely true. I am just going from the recent public article.

It is likely that Finskiy and friends/associates/affiliates control between 75 – 95% of White Tiger Gold common shares.

I haven`t run the numbers on Zaruma lately, but my original calculations (a while ago) showed the potential of Finskiy-Scola controlling about 88% of Zaruma shares (after exercising is extremely cheap warrants – 78% prior).

It is likely that Finskiy and friends/associates/affiliates control about 35 – 40% Century Mining shares.

After handing out all those cheap shares to Finskiy-Scola, (if I recall recorrectly) Zaruma will have in the ballpark of 800 million shares (after cheap warrants get converted). Again, readers should understand that these figures may not be updated.

Also, in my personal opinion, Zaruma brings to the table even far less than White Tiger Gold, with regards to assets.

Now, use your imagination of what the ownership structure of the combined company would look like if they decided to merge Zaruma with White Tiger Gold – Century Mining, afterwards. Again, I am not saying that this is what they have planned, but I am concerned about this being a possible direction of Century Mining (as a Century Mining shareholder).

As you know, Severstal has been after 100% ownership of High River Gold for a while now. They started with 51% ownership. They then initiated a series of questionable moves to get their ownership up to around 73%. In my opinion, many of the moves were clearly illegal, but they got away with them. Severstal has been stalled over the past year, but continue to suppress HRG`s situation while they attempt to identify additional moves to get the 73% to 90% (in my opinion). Getting to 90% will allow them to squeeze out minorities and move 100% of HRG into their own London IPO gold company (Nord Gold – the HRG assets are the star assets of the portfolio).

Again, use your imagination as to how much closer Finskiy could become to the 90% squeeze out level if he was to eventually combine WTG, CMM and Zaruma.

You can continue using your imagination further if you like. What happens if Prokhorov and Finskiy decides to go the Severstal route, with regards to Intergeo? If they are able to squeeze out minorities of a WTG-CMM-Zaruma combined company, an Intergeo TSX or London IPO listing could include 100% of a Prokhorov-Finskiy owned WTG-CMM-Zaruma. If they are unsuccessful in squeezing out minorities then they would still be able to include a large portion of WTG-CMM-Zaruma (again, do the math) as part of the Intergeo IPO, if they so choose. How much of the pie will be left for current Century Mining minorities at that point (after such continuous dilution)?

Again, all of this simply represents my opinions and viewpoints. I have posted them strictly for blog discussion purposes (and with no other purposes in mind).

Please note that I have also included (below) 2 other prior blog posts of mine with regards to Zaruma – strictly for background info. The first time I posted about Zaruma was September 2010. I repeated that first post as part of a March 6, 2011 post (which is the version I`ve included below).

With regards to PDAC, what is surprising (and interesting) is that Zaruma Resources is listed as a participant at PDAC. Normally, companies that are in survival mode are completely inactive as they attempt to conserve every single dollar.

Below is a summary of the Zaruma situation, which I originally posted on September 3, 2010. It also includes some of my thoughts about the situation.

Although I haven`t been following the developments closely, I don`t think the bank funding and the equity funding have been closed off as yet. I think the company might still be in a survival mode situation.

Of note, I did manage to take (literally) only a 30 second glance of the document that was presented to their shareholders for approval. I believe I saw Finskiy`s name added on there as a key equity financing backer, along with Scola of course.

Also of note, I think Zaruma is now trading at $.10 per share on the NEX exchange, but this is before the huge share dilution to Scola and friends kicks in.

Here is my previous summary of the Zaruma situation (represents only my interpretation, way back on September 3, 2010 – and again, I haven`t followed developments closely over the past 6 months):

``…….. I will provide some fyi info on one of Scola`s other ventures (since there was an update today).

Scola, via his Gravity investment company, has stepped in to try to salvage a company called Zaruma. They are in serious financial difficulties. Zaruma has a near completed copper operation (in Mexico). It also has a nearby gold deposit with decent potential. Unfortunately, it has $38,000,000 in liabilities that are past due, with $27,000,000 of that amount being secured debt.

Scola stepped in this year (as an investor) and has provided them with $800,000 in convertible debt to help them survive near-term – can be converted to 16M shares plus 16M warrants. Zaruma has 118M shares outstanding.

Scola has a non-binding equity deal with them to provide $20M @ $.05 plus equivalent warrants at $.10 each. However, the deal will only go through with at least $20M of debt financing being arranged. A non-binding copper off-take debt deal was arranged in August for $30M, with a `major international bank`.

If the deal goes through Scola will own 78% of the company. If he exercises his warrants he will own 88%.

The bank gets a nice off-take deal though. They get 208 monthly tonnes of copper (459K lbs) for 48 months. Planned production for the operation is 600 monthly tonnes of copper cathodes (1,323K lbs).

At $3 copper per lb, this gives Scola/Zaruma $2.6M monthly gross revenue (there is also a price participation on top of this from the off-take lbs). They estimate it will cost $1.15 to produce a lb. That means monthly costs of $1.5M (plus corporate G&A and such). It looks like Scola can still make money, but he will need the copper price to remain high.

It clearly doesn`t have nearly the potential as Century Mining.

I think the Zaruma approach might be to use the copper cash flow to advance the gold part of the property. I think (with development and upgrade of the processing operation) they could fast track 25,000 gold ounces per year into production for 4 years (plus more with successful exploration). I think that would make their operation more attractive/profitable.

I wonder if Scola with do anything with the property if the deal closes and if he is able to make the operation work (profitably). Will he bundle it up with other base metal assets to grow it as base metal vehicle or will he bundle it with one of his other gold vehicles or will he keep it as a stand alone company and try to grow it organically. Perhaps his decision will depend on which metals perform the best, coupled with other discounted opportunities he may find in the future.``

``September 3, 2010 11:34 AM``